Credit and Finance for MSMEs: Small Industries Development Bank of India (SIDBI) on Monday said more than Rs 276 crore loans have been disbursed under its Prayaas programme to over 18,000 small entrepreneurs “who are at sustenance level and aspire to reach an enterprise level.” The scheme offers credit up to Rs 5 lakh loan in partnership with financial and non-financial intermediaries to women and micro entrepreneurs at the bottom of the pyramid at an affordable rate, SIDBI said in a statement.

SIDBI has a dedicated corpus of Rs 1,000 crore earmarked for the programme to provide loans for livelihood activities at interest rates not exceeding 13 per cent, according to the programme details available on SIDBI’s website. The addressable credit demand of Rs 11.90 lakh crore in the micro enterprise segment, women entrepreneurs accounting for around 20 per cent of the total proprietary concerns in India, and the cost of micro credit remaining on a higher side are reasons driving SIDBI to come up with focused interventions to support entrepreneurs in livelihood space, the bank noted. 

In order to digitize the Know-Your-Customer (KYC) process and the process of e-signing and e-stamping of various documents of borrowers, SIDBI had also launched the Digital Prayaas scheme in August 2021. Under the scheme, SIDBI had also tied up with BigBasket to onboard its delivery partners across the country and provide loans for the purchase of e-bikes and e-vans.

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To support rural micro and small enterprises, SIDBI had also announced sanctioning Rs 650 crore in financial assistance in January this year to two small finance banks — AU Small Finance Bank and Jana Small Finance Bank to enable credit to Covid-hit units through low rated or unrated small non-banking financial companies (NBFCs) and microfinance institutions (MFIs). 

The recent schemes by SIDBI have been launched in the backdrop of the Covid impact on MSMEs. According to a survey of a random sample pool of 1,029 MSMEs across 20 States and two union territories conducted by SIDBI late last year and announced in January this year, 67 per cent MSMEs had reported temporary closure for up to a three-month period during Covid in the financial year 2020-21. Also, around 66 per cent units had reported a decline in profitability on account of stable fixed costs and a decline in revenue. The survey results were shared by the MSME Minister Narayan Rane in reply to a question in Lok Sabha in February.